Chapter Nine

Product, Services, and Brands: Building Customer Value

Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 1

Product, Services, and Branding Strategy

Objectives
Define product and the major classifications of products and services. Describe the decisions companies make regarding their individual products and services, product lines, and product mixes. Discuss branding strategythe decisions companies make in building and managing their brands. Identify the four characteristics that affect the marketing of a service and the additional marketing considerations that services require.
Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 2

What Is a Product?
Products, Services, and Experiences

Product is anything that can be offered in a market for attention, acquisition, use, or consumption that might satisfy a need or want Services are any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything Experiences represent what buying the product or service will do for the customer

Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 3

What Is a Product?
Levels of Product and Services

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Chapter 9 - slide 4

What Is a Product?
Product and Service Classifications

Consumer products

Business products
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Chapter 9 - slide 5

What Is a Product?
Product and Service Classifications

Consumer products are products and services for personal consumption Classified by how consumers buy them
Convenience products Shopping products Specialty products Unsought products
Chapter 9 - slide 6

Copyright 2011 Pearson Canada Inc.

What Is a Product?
Product and Service Classifications Convenience products are consumer products and services that the customer usually buys frequently, immediately, and with a minimum comparison and buying effort Newspapers Candy Fast food
Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 7

What Is a Product?
Product and Service Classifications Shopping products are consumer products and services that the customer compares carefully on suitability, quality, price, and style Furniture Cars Appliances

Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 8

What Is a Product?
Product and Service Classifications

Specialty products are consumer products and services with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort Medical services Designer clothes Rolex watches

Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 9

What Is a Product?
Product and Service Classifications Unsought products are consumer products that the consumer does not know about or knows about but does not normally think of buying Life insurance Funeral services Blood donations

Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 10

What is a Product?
Summary Table

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Chapter 9 - slide 11

What Is a Product?
Product and Service Classifications Industrial products are products purchased for further processing or for use in conducting a business Classified by the purpose for which the product is purchased
Materials and parts Capital Raw materials
Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 12

What Is a Product?
Product and Service Classifications

Capital items are industrial products that aid in the buyers production or operations Materials and parts include raw materials and manufactured materials and parts usually sold directly to industrial users Supplies and services include operating supplies, repair and maintenance items, and business services

Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 13

What Is a Product?
Organizations, Persons, Places, and Ideas

Organization marketing consists of activities undertaken to create, maintain, or change attitudes and behaviour of target consumers toward an organization

Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 14

What Is a Product?
Organizations, Persons, Places, and Ideas

Person marketing consists of activities undertaken to create, maintain, or change attitudes and behaviour of target consumers toward particular people

Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 15

What Is a Product
Organizations, Persons, Places, and Ideas Place marketing consists of activities undertaken to create, maintain, or change attitudes and behaviour of target consumers toward particular places Social marketing is the use of commercial marketing concepts and tools in programs designed to influence individuals behaviour to improve their well-being and that of society

Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 16

Product and Service Decisions

Individual Product and Service Decisions

Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 17

Product and Service Decisions

Individual Product and Service Decisions Product attributes are the benefits of the product or service Quality Features Style and design

Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 18

Product and Service Decisions

Individual Product and Service Decisions
Product quality includes level and consistency Quality level is the level of quality that supports the products positioning Total Quality Management (TQM) is an approach in which all the companys people are involved in constantly improving the quality of products, services, and business processes. Conformance quality is the products freedom from defects and consistency in delivering a targeted level of performance
Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 19

Product and Service Decisions

Individual Product and Service Decisions Product features are a competitive tool for differentiating a product from competitors products Product features are assessed based on the value to the customer versus the cost to the company

Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 20

Product and Service Decisions

Individual Product and Service Decisions Style describes the appearance of the product Design contributes to a products usefulness as well as to its looks

Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 21

Product and Service Decisions

Individual Product and Service Decisions Brand is the name, term, sign, or designor a combination of thesethat identifies the maker or seller of a product or service Brand equity is the differential effect that the brand name has on customer response to the product and its marketing

Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 22

Product and Service Decisions

Individual Product and Service Decisions Packaging involves designing and producing the container or wrapper for a product Labels identify the product or brand, describe attributes, and provide promotion
Chapter 9 - slide 23

Copyright 2011 Pearson Canada Inc.

Product and Service Decisions

Individual Product and Service Decisions
Product support services augment actual products

Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 24

Product and Service Decisions

Product Line Decisions Product line is a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges

Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 25

Product and Service Decisions

Product Line Decisions
Product line length is the number of items in the product line Line stretching Line filling

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Chapter 9 - slide 26

Product and Service Decisions

Product Mix Decisions

Product mix consists of all the products and items that a particular seller offers for sale Width Length Depth Consistency
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Chapter 9 - slide 27

Branding Strategy: Building Strong Brands

Brand represents the consumers perceptions and feelings about a product and its performance. It is the companys promise to deliver a specific set of features, benefits, services, and experiences consistently to the buyers

Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 28

Branding Strategy: Building Strong Brands

Brand Positioning Brand strategy decisions include: Product attributes Product benefits Product beliefs and values

Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 29

Branding Strategy: Building Strong Brands

Brand Name Selection

Desirable qualities 1. Suggest benefits and qualities 2. Easy to pronounce, recognize, and remember 3. Distinctive 4. Extendable 5. Translatable for the global economy 6. Capable of registration and legal protection

Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 30

Branding Strategy: Building Strong Brands

Brand Sponsorship

National brands (manufacturers brands) are created by the manufacturer Store brands (private brands) are brands created and owned by a reseller of a product or service

Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 31

Branding Strategy: Building Strong Brands

Brand Sponsorship

Licensing uses previously created names or symbols for a fee Co-branding is the practice of using the established brand names of two different companies on the same product

Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 32

Branding Strategy: Building Strong Brands

Brand Development Strategies

Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 33

Branding Strategy: Building Strong Brands

Brand Development Strategies Line extension involves extending an existing brand name to new forms, colours, sizes, ingredients, or flavours of an existing product category Brand extension involves extending an existing brand name to new product categories Multibrands are additional brands introduced in the same product category New brands are brands created when entering a new product category for which none of the current brand names are appropriate
Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 34

Services Marketing
Types of Service Industries

Government Private not-for-profit organizations Business organizations

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Chapter 9 - slide 35

Services Marketing
Nature and Characteristics of a Service

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Chapter 9 - slide 36

Services Marketing
Marketing Strategies for Service Firms In addition to traditional marketing strategies, service firms often require additional strategies Service-profit chain Internal marketing Interactive marketing

Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 37

Services Marketing
Marketing Strategies for Service Firms
Service-profit chain links service firm profits with employee and customer satisfaction Internal service quality Satisfied and productive service employees Greater service value Satisfied and loyal customers Healthy service profits and growth

Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 38

Services Marketing
Marketing Strategies for Service Firms
Internal marketing means that the service firm must orient and motivate its customer contact employees and supporting service people to work as a team to provide customer satisfaction Internal marketing must precede external marketing

Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 39

Services Marketing
Marketing Strategies for Service Firms
Interactive marketing means that service quality depends heavily on the quality of the buyer-seller interaction during the service encounter Service differentiation Service quality Service productivity

Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 40

Services Marketing
Marketing Strategies for Service Firms
Managing service differentiation creates a competitive advantage from the offer, delivery, and image of the service Offer can include distinctive features Delivery can include more able and reliable customer contact people, environment, or process Image can include symbols and branding
Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 41

Services Marketing
Marketing Strategies for Service Firms

Managing service quality provides a competitive advantage by delivering consistently higher quality than its competitors
Service quality always varies depending on interactions between employees and customers
Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 42

Services Marketing
Marketing Strategies for Service Firms Managing service productivity refers to the cost side of marketing strategies for service firms Employee recruiting, hiring, and training strategies Service quantity and quality strategies

Copyright 2011 Pearson Canada Inc.

Chapter 9 - slide 43